Week 10 - Government Policy

On Monday 31st March, 2014, the United Nations Intergovernmental Panel of Climate Change released a report detailing the likelihood of severe and irreversible damage if high greenhouse gas emissions continue and the planet warms. In Australia, opinion remains divided upon how to best tackle this issue, with the Liberal government's direct action policy superseding that of Labour's emission trading scheme. Increasing the cost of living, specifically gas and electricity prices, the 'carbon tax' was scrapped on the premise that it placed too great a strain on the Australian economy. On the converse, the 'direct action policy' aims to reduce emissions by providing financial incentives to the nation's leading polluters to do so, in accordance with the implementation of green projects, e.g. the exploration of soil carbon technologies and abatement.

Both schemes can be classified as polar opposites, and, as a result, the most appropriate solution to ensure a healthy integration between sustainability and cities probably lies somewhere in between. Advocates for the carbon tax argue that it will result in greater and more immediate reduction in emissions, and that this mechanism is the only viable solution to ensure that Australia matches the ambition of other countries, who plan a 19% cut by 2020 and a reduction of 40-60% by 2030. In saying this, the carbon taxes' ability to act as a panacea for reduced emissions is unquestioned, however would see that Australians would pay dearly in lost jobs, and higher prices for electricity, groceries and goods and services. As a consequence, the economic implications may prove to be too costly and potentially impact upon the future capacity to facilitate sustainable initiatives.

On the other hand, the direct action policy is centred on an 'emissions reduction fund' a pool of $2.55 billion of taxpayers' money, from which some of the nation's biggest polluters will be paid incentives to cut their greenhouse gases. This is proposed to be done by means of reverse auction, with firms who submit the lowest bids, the least expensive way to reduce emissions, to get government subsidies. In comparison to the carbon tax, the biggest point of difference is target reductions, with the direct action plan set to reduce emissions by 5% on 2000 levels. When measured against other advanced nations, this target is hardly ambitious, and criticised by environmentalists due to the fact that a stable economy is prioritised over reduced emissions.

As mentioned previously, the ideal solution probably incorporates aspects of both schemes. In the long term, rewarding the reduction of emissions, as opposed to simply taxing them, will provide greater incentive to be sustainable. With the direct action plan, reduced emissions from power plants are aided by making buildings more energy efficient, planting trees and storing carbon in soil. By contrast, the ability to implement such mechanisms under the carbon tax would be questioned due to the economic burden which taxing emissions itself carries. In addition, the argument that the direct action plan (in comparison to the carbon tax) is economically inefficient, doesn't necessarily wash. Even though it requires tax payers money, it does not cripple pensioners, small businesses, family and industry by taxing all electricity in the economy and forcing down demand. Of cause for greater concern is the fact that the direct action plan only targets the nation's 130 biggest polluters. It neglects to address the issue of the country's other emitters, and must be careful that proposed cuts aren't underdone by other businesses increasing emissions. Furthermore, companies which have spent time and money switching to more efficient methods of production do not benefit.

Comment, 2014. Inaction on climate change is no laughing matter. Sydney Morning Herald, 01 April. 14.

Cox, L, 2014. White paper leaves questions unanswered. Sydney Morning Herald, 25 April. 5.

Lloyd, G, 2014. Minimal attitude suits climate action mood. The Australian, 25 April. 6.

Lloyd, G, 2014. PM plans for $1bn climate top-up. The Australian, 25 April. 1.

Cox, L 2014. Key senators give direct action policy a chilly reception. Sydney Morning Herald, 26-27 April. 9.

Comment, 2014. Paying polluters, robbing taxpayers is poor policy. Sydney Morning Herald, 28 April. 16.